See tax increases, think pensions

Despite the ridicule heaped on bonuses offered public workers for simply doing their jobs – just one prime example: a librarian earning a bonus for helping members of the public find books – the California Retirement System board last week made sure the bonuses added to salaries will be part of pension calculations.

While the exact cost to taxpayers is uncertain, the price tag for pensions because of this move is certain to go up. State and local governments have contributed four times to CalPERS what they contributed just a decade ago.

Local budgets are being eaten away by the pension and health care obligations. In the city of Los Angeles, for example, pensions costs took 3 percent of the city budget in 2002-03, but ate 18 percent of the budget in 2012-13.

Or as an official with the Wall Street rating service Fitch was quoted in a recent Los Angeles Times article concerning the 99 new bonuses that increase pensions, “Cities and taxpayers will undeniably face higher costs. Pensions are taking a bigger share of the pie, leaving less money for core services.”

They’ll never say that, of course. They’ll argue that new tax money is needed for direct services for residents. But the bonuses, which appear less than deserved, and their inclusion in the pension calculations, show there is little regard for taxpayers.

As the Times article noted, “With $300 billion in investments, CalPERS estimates it still needs an additional $100 billion from taxpayers to deliver on its promised pensions to 1.7 million public workers and retirees. That amount would be enough to operate the 23-campus California State University system for 16 years.”

Expect a push for more taxes.

Sales and parcel tax increases

As reported here, last week David Kline of the California Taxpayers Association wrote 53 jurisdictions are seeking sales tax increases and 40 are asking voters to approve parcel taxes. When you see tax increases on the ballot, think pension costs.

Money in government budgets is fungible to some extent. If you cover specific agency costs with a tax increase, that frees up general fund money for other items, including pensions.

There are groups of activists who are spending time right now trying to figure out how they can convince voters to agree to a number of tax increases all at once on the 2016 ballot – an extension of Proposition 30, a property tax increase for commercial property, an oil severance tax, a cigarette tax, to name a few.

If and when you see those tax increases on the ballot, think pensions.

Until there are reforms put in place in the pension system so taxpayers are not forced to cover someone else’s unreasonable pension costs – like costs tied to bonuses that are part of the job description – while struggling to save for their own retirement, the argument for more tax revenue is impossible to justify.

A sidebar to the Times article listed some of the 99 bonuses that will boost pensions. You can find them here.

18 comments

Voting is a joke. Even if the Pubs take both the House and the Senate the outcome is the same. You older folks should have figured this out by now. The pattern is obvious. A 5th grader should be able to see it. The people were fed up with Pub HW Bush so elected Dem Clinton. Then fed up with Dem Clinton and elected Pub GW Bush. Then fed up with Pub GW Bush and elected Dem Obola! HAH! This is to convince you that your system works. But regardless who the POTUS is and regardless who holds the majority in the House or the Senate you always get the same damn results! FAILURE!!! HAH! Yet you continue to go to the polls and cast your votes!!! HAH! You’re being played for Christ sakes! GROW UP!!!!
As long as your political system is owned by Pubs and Dems – YOU’RE GOING TO GET PLAYED!!! That’s a given. The dem and pub pols are actors who bicker when the cameras are rolling. Behind closed doors it’s nothing but back slaps and secret deals! The fact is you’ve been divided and conquered. You think YOUR team is the best – when the Pubs and the Dems are team members who simply wear different colored jerseys!!! HAH! Out of the 535 jokers in Congress NOT ONE IS FROM A 3RD PARTY!!! HAH! You call that a friggin’ democracy???
The whole system is a farce because of this simple fact – the political system is not adversarial. It is a COLLABORATIVE system that has turned us into a kleptocracy.
PLEASE – don’t swallow the bait on the Pub-Dem system. USE YOUR BRAINS! You can’t beat them at the polls. And you can’t beat them in the courtrooms!
GO GALT!!!! Don’t give – TAKE!!!!! 🙂

I have to laugh when I go back to San Diego and navigate rutted potholed streets that make Tijuana look like Zurich..Of course they don’t have the resources to actually DO THEIR JOBS because they pay themselves the ENTIRE BUDGET…

Thanks for paying what you owe. When I say “owe”, I mean what you bargained for, agreed to, accepted performance of the other party and litigated extensively in courts to try to deny what you obligated yourselfs to. And of course lost that litigation over and over and over again—-

We never bargained for anything. It was forced down our throats by political frauds who were bribed by the unions. If we lived in a true democracy they would let us vote on a proposition to discontinue pensions in the public sector, since we pay for the large part of the benefit. But they won’t do that because they know pensions would get voted down by a 70%-30% margin. It’s all part of the kleptocracy in the ‘land of freedom’. You don’t fool me. 🙂

No TCS, it is a RAGWUS system that steals and lies to enhance their wealth without doing anything for the taxpayers, other than creating debt to the younger citizens. The point is coming when all you will have is poor and rich in this state, it will become a wasteland at your behest. 🙂